How USD/JPY declined, the Fed came to the rescue

How USD/JPY declined, the Fed came to the rescue

The safe-haven fascination of the Japanese Yen has boosted requests for the currency, leading to a drop in USD/JPY. This decrease is to take control of the banking crisis through the trading market in the United States due to the Silicon Valley Bank (SVB) collapse. Due to the Unites States’ financial instability, the USD/JPY has fallen below average.

The USD/JPY is unbiased after the 200, 100, 50, and 20-day Exponential Moving Averages (EMAs), converging around the 134.05-29 area. The rate of Change (RoC) and Relative Strength Index (RSI) are oscillators that propose that sellers are in charge. Based on the fact that the leading indicator is the price action, sellers needed to restore the 10th of February daily low at 129.79, which could lead to further decline.

The USD/JPY must drop below 132.21; once this is done, the 132.00 figures will be bought. The seller’s next purchase will be the daily low of 128.08 and the YTD low of 127.21. Alternatively, its first resistance would be 200-day Exponential Moving Average at 134.05. This scenario would expose the 20 and 50-day EMAs at 134.59 and 134.13, respectively, before testing the 100-day EMA at 134.92. the buyers would be able to rehabilitate 135.00 once broken.

USD was expected to trade between 135.00 and 133.50. In London trade, USD rose to 135.11, dunked to 132.21 and revolved to 133.40 in New York (-0.61%). Today, USD could trade between 132.30 and 134.30. Due to the fact break of the strong, resistant level of 135.10, there is liberty for USD to decline more.

What Is the Future of USD/JPY?

The release of the Philly Fed Manufacturing Index redeems the expected US jobless claims and housing market data and needs to provide more to provide momentum. From the technical aspect, the intraday downfall has led to a decrease in USD/JPY below the 50% Fibonacci retracement level. Oscillators on the daily chart have begun earning negative constriction.

USD/JPY pair might increase the fall towards the next support marked by a 61.8% Fibonacci retracement level, around 131.25 regions. A 131.00 mark follows, low which the descending trajectory could extend towards the 130.60 intermediate support before the price drops to the 130.00 psychological mark. USD/JPY might still increase.